OPINION
This decision follows a trial on the plaintiffs’ claims of a Fifth Amendment taking without just compensation of their mineral servitude, known as “Group C,” in Vernon Parish, Louisiana. The mineral servitude involves land owned by the United States, occupied by Fort Polk and the Kisatchie National Forest. Many of the issues regarding ownership of the mineral servitude and the nature of the subject taking were resolved in earlier decisions by this court, the United States District Court for the Western District of Louisiana, and the United States Court of Appeals for the Fifth Circuit.
Prior to trial, the parties entered into extensive joint stipulations of fact. Those stipulated facts are summarized below, in Part I. In Part II, the court summarizes the evidence introduced at trial both through testimony in court and through depositions in connection with the court’s findings and conclusions on the plaintiffs’ temporary taking claim. In Part III, the court summarizes the evidence received and its findings and conclusions with regard to the plaintiffs’ permanent taking claim.
I. STIPULATED FACTS
The following stipulated facts detail the history of the plaintiffs’ acquisition of the mineral servitude at issue in this dispute, the quiet title litigation over ownership of the mineral servitude, the efforts made by the plaintiffs to lease the subject mineral servitude, and the efforts by oil and gas companies to develop the minerals in Group C.
A. History of the Mineral Servitude and Moratoriums
In 1929, Gulf Lumber Company conveyed all oil, gas, and minerals under approximately 100,000 acres of land in Vernon Parish, Louisiana to S.H. Fullerton. The warranty mineral deed executed by Gulf Lumber Company created a mineral servitude that allowed S.H. Fullerton to explore and develop the minerals covered by the deed.
In 1930, S.H. Fullerton transferred these mineral interests to Fullerton Minerals Company, and, in 1937, Fullerton Minerals Company conveyed the same mineral interests to William T. Burton. By four separate transactions in 1933, 1936, and 1938, the United States acquired by deed or by expropriation certain lands from Gulf Lumber Company subject to the outstanding mineral servitude held by Mr. Burton after 1937. These lands are referred to in this litigation and in the related quiet title action as the “Group A” and “Group B” lands. In 1937, Mr. Burton also acquired complete title to certain lands in Vernon Parish which included lands that have come to be known as the “Group C” lands in these proceedings.
The plaintiffs are the owners in indivisibly of all of the oil, gas, and other mineral interests in Group C. Plaintiffs Central Pines Land Company (“Central Pines”) and Tower Minerals Company, L.L.C. (“Tower Minerals”) own, in equal undivided proportions, the mineral servitudes relating to Group C lands.
Approximately 16,000 acres of Group C are located within Fort Polk, a military facility of the United States Department of Army, and approximately 5100 acres of Group C are located within the adjacent Kisatehie National Forest. The approximately 16,000 acres of Group C within Fort Polk are located within the Fort’s “Main Post,”
Between 1943 and 1978, the United States imposed a series of drilling and operations moratoriums on Mr. Burton and his successors-in-title relative to Group C through a series of expropriations. These mineral moratoriums prevented the owners of the mineral servitude covered by the moratorium from entering lands owned by the United States for the purposes of exploring or developing those minerals. Approximately 31,295 acres of mineral interests owned by Mr. Burton and his successors were covered by the mineral moratoriums.
Between 1978 (when the moratoriums were lifted) and January 1, 1995, the plaintiffs did not attempt to exercise mineral rights on Group C. In the early 1980s there were efforts made to do some seismic testing at Fort Polk, but the efforts were dropped, allegedly due to risks inherent in going on to the Fort to conduct the testing.
From 1995 to the present, no plaintiff has made an oral or written request to the U.S. Army or the U.S. Forest Service to access and use the surface of Group C for the purpose of oil and gas exploration. Since the mineral moratoriums ended in 1978, the United States has taken no formal action to deprive the plaintiffs of access to Group C minerals.
B. Leasing Activities
On October 7, 1993, Charles E. Steele, Director of Lands and Minerals for the Forest Service, which is within the U.S. Department of Agriculture (“USDA”), issued a memorandum to the Bureau of Land Management (“BLM”) that advised that the minerals underlying certain lands, including some Group C lands administered by the Forest Service, were available for leasing by the United States based on the Louisiana law of prescription.
By letter dated April 6,1995, Uniоn Pacific Resources Company (“UPRC”) offered to lease from the plaintiffs 30,789.76 acres in Vernon and Rapides Parishes, Louisiana. This offer included approximately 7944.80 acres in Township 1 North, Range 5 West, in Vernon Parish that are part of the Group C lands. By letter dated April 12,1995, UPRC revised its prior lease offer to include 25,-066.98 acres in Rapides and Allen Parishes to be leased on the following terms: $50 per acre bonus, delay rentals of $50 per acre in years two and three and $75 per acre in years four and five, royalty of 20% escalating to 25% after payout on a well-by-well basis, and a primary term of five years.
In 1995, representatives of Sonat Exploration Company (“Sonat”) met with Army representatives regarding mineral development at Fort Polk. On August 16, 1995, Sonat submitted an application for a permit to drill for the Scobee 34-1 well
In March 1996, the plaintiffs commenced negotiations with Belco Oil & Gas Corporation (“Belco”) to lease 20,295 acres of the Group C mineral interest. By letter to Bel-co, dated March 21, 1996, the plaintiffs extended a non-exclusive offer to lease approximately 20,295 acres of minerals for a three-year primary term, with a bonus payment of $300 per acre, annual rentals of $300 per acre and a royalty of 27.5%. The letter stated that “[t]his offer may be revoked at any time but under no circumstances shall extend beyond 5:00 p.m., Friday, March 29, 1996.” On June 18, 1996, representatives of Belco met with representatives of Fort Polk. A June 19,1996 Fort Polk memorandum for Colonel Proseh regarding the meeting reported, “Belco Mtg. After 2 hr. session they are willing to locate wells to reduce impaсts on training. They will get back with us after the test well is drilled and is a producer, Jan-Feb. If it’s a dry hole, they plan no drilling on our training areas.”
An “Info Paper” prepared at Fort Polk and dated March 7, 1996, on the subject of “Oil Exploration,” describes a meeting between Sonat and Fort Polk personnel regarding Sonat’s future plans for oil exploration on lands associated with Fort Polk. In a memorandum dated March 12,1996, on the subject of “Oil Exploration and Production Activities,” Ronald N. Tomas, Senior Advisor at Fort Polk, describes a meeting with Sonat representatives on March 6, 1996. This memorandum states that “[a]greement was reached ... to assemble a team from the
In a memorandum dated April 1, 1996, from Mr. Collipp of Sonat to Herb Carter Deputy Director of Public Works at Fort Polk, Mr. Collipp stated, “Sonat would like to begin drilling within the box in early 1997.” The memorandum includes a suggested agenda for a meeting scheduled for April 2, 1996. A sign-in sheet from that meeting lists attendees from Sonat and Fort Polk in attendance. By letter dated April 11, 1996, Mr. Collipp provided Mr. Carter “a map showing the first four well locations which Sonat would like to survey during the upcoming 4/28-5/8 window.” This map shows well locations for wells labeled as U.S.A. 17, U.S.A. 22, U.S.A 19, and U.S.A. 31.
By letter dated April 24, 1996, Sonat expressed an interest in leasing approximately 8271.58 acres of the plaintiffs’ “Tract C” minerals. The area is described in the letter as the “lands which the BLM recently nominated and then removed from the most recent lease sale, and which Sonat believes will be included in its development plan as either drillsite or unit acreage for the drilling of horizontal Austin Chalk wells.” The letter contains a description of the acreage in question and the lease terms proposed by Sonat. The plaintiffs responded by letter dated May 1, 1996, rejecting Sonat’s offer. In this letter, the plaintiffs informed Sonat that they “are negotiating with others for a lease on the entirety of our Tract C. However, based on your assertion that a portion of our Tract C falls within the development plan of Sonat [ ] for other Lawton acreage, we sеe a benefit in leasing it to Sonat.” The plaintiffs’ letter contains a nonexclusive offer to Sonat to lease 9798.44 acres on terms set forth in that letter. By letter dated May 9, 1996, Sonat responded to the plaintiffs’ letter, and declined to accept the lease offer set forth in that letter. Sonat’s letter includes a counteroffer to lease the same 9,798.44 acres on terms set forth in that letter. Central Pines and Tower Minerals finally entered into a mineral lease with Sonat that was effective July 1, 1996. The Sonat lease encompassed approximately 28,668.93 acres of property, including approximately eighty acres of Group C minerals. The remaining acreage included Groups A and B.
Approximately 5300 acres of mineral interests underlying Group C lands were included in a BLM issued Notice of Competitive Lease Sale for Oil and Gas to be held on March 28,1996. Mike Cruse, Deputy General Counsel at USDA, referred the plaintiffs to Jeffery D. Eisenberg, also in Office of General Counsel at USDA. By letter dated February 29, 1996 to Mr. Eisenberg, the plaintiffs again asserted title to Group C minerals. By this time, portions of Group C minerals were being offered for lease by the United States. The plaintiffs requested that the properties be withdrawn from the proposed federal lease sale. Pursuant to Mr. Eisenberg’s request, by letter dated March 11,1996, the plaintiffs submitted a settlement proposal relating to Groups A, B, and C whereby, in exchange for recognizing the plaintiffs’ title, the United States would be compensated for mineral production. By letter dated August 6, 1996, Mr. Eisenberg responded to the plaintiffs’ letter of March 11, 1996 and rejected the proposed “settlement to the Forest Service for a division of revenue that may be generated from oil and gas deposits for which your clients claim ownership.” On August 22, 1996, the plaintiffs filed a lawsuit for declaratory judgment pursuant to 28 U.S.C. § 2201 and to quiet title pursuant to 28 U.S.C. § 2409a. The plaintiffs sought recognition of their title to the Group A, B, and C mineral servitudes. See Central Pines I, No. 2:96-2000; Central Pines II,
On September 11, 1996, Sonat submitted its Application for Permit to Drill for the U.S.A. 21-1. In a Sonat memorandum dated September 19, 1996, David Davas sent Mr. Collipp and others a copy of a Surface Use and Operational Plan Agreement used by Sonat in the drilling of a well at Fort Chаffee in Arkansas. The memo states that the Agreement “is a good base for us to begin drafting our Surface Use Agreement with Fort Polk.” On September 26, 1996, Sonat representatives met with Fort Polk staff re
By letter dated September 23, 1996, Chesapeake offered to lease from the plaintiffs approximately 4383.67 acres of land in Township 1 North, Range 5 West and Township 1 South, Range 5 West, in Vernon Parish, Louisiana. The then-pending dispute over the ownership of the mineral rights between the plaintiffs and the United States is noted in this letter. In offering to lease these mineral interests, Chesapeake states in this letter that it agrees “not to take a position contrary to the [plaintiffs] in the pending lawsuit,” but also “expressly reserves the right to seek protection leases from the United States covering the leased lands.” The letter of September 23, 1996, from Chesapeake to the plaintiffs further states:
As a condition of this offer, lessors must agree not to interfere with Chesapeake’s attempt to secure a protection lease from the U.S.A_
Additionally, as you know, the U.S.A. is contemplating excluding the subject acreage from the October 24,1996 federal lease sale due to a perceived threat that Central Pines et al. will seek a temporary restraining order to block the leasing of these lands. However, they have assured me the acreage will not be stricken from the sale if Central Pines et al. will confirm in writing that no such TRO will be sought with regard to this acreage. Therefore, this offer is further contingent upon Central Pines et al. providing such written assurance as will satisfy the S.A. in order to allow the federal lease sale to proceed as scheduled on these lands.
In a letter dated September 26, 1996, to Henry Hood of Chesapeake, from Thad D. Minaldi and William Lawton, the plaintiffs clarified the acreage for lease. In a letter dated September 26, 1996, to Henry Hood, Chesapeake, from Mr. Minaldi and Mr. Law-ton, the plaintiffs agreed to take no action to prevent the proposed federal lease sale through which Chesapeake sought to acquire protective leases.
On September 26, 1996, effective September 15, 1996, the plaintiffs entered into a mineral lease with Chesapeake covering 4822.10 acres of Group C.
By a memorandum dated September 27, 1996, the Forest Service reported to BLM regarding its consent to lease certain lands listed in the October 24, 1996 Competitive Lease Sale Notice. The memorandum states that Parcels ES-034 through ES-043 “have not been cleared to lease and will require deletion from the sale notice” and that Par
By letter dated October 9, 1996, United States Department of Justice attorney Bret Birdsong advised the plaintiffs that additional Group C acreage may be included in subsequent scheduled lease sales by the United States and requested that the plaintiffs agree to not attempt to upset the sales with regard to the additional acreage. The plaintiffs acquiesced and by letter dated October 9, 1996 complied with the request.
On October 24, 1996, the United States answered the plaintiffs’ complaint in the quiet title action, denying the plaintiffs’ allegation that the plаintiffs were owners of mineral interests to the Group A, B, and C lands.
In a letter dated November 1, 1996, Bel-co’s attorney advised Mr. Carter at Fort Polk that Beleo “no longer intends to pursue permission to conduct drilling opportunities on Fort Polk in the foreseeable future. The success of Beleo operations in other parts of Louisiana has been such that they have decided to concentrate their operations in those areas.”
On November 12, 1996, Chesapeake filed an application with the Louisiana Office of Conservation to drill the Lawton 4-1 well. The requested permit was issued on November 15, 1996. By memorandum dated November 21,1996, the Forest Service reviewed BLM Leasing Alternatives. By letter dated January 9, 1997, Tom Price of Chesapeake wrote to Ted Hammersmith [sic] at Fort Polk in reference to their “previous conversation regarding the interest of Chesapeake Energy Corporation in coordinating its potential oil and gas exploration efforts with Fort Polk offices to ensure future access to the base to prosecute our drilling activities on a reasonable and timely basis[.]” The letter includes a list of issues for “discussion and resolution” and requests the opportunity to meet with Fort Polk officials.
An Army document dated January 22, 1997, captioned “Standard Operating Procedures for the Exploration and Development of Oil and Gas Resources, 22 January 1997,” was sent to a distribution list with note to “Please Review and Return to: Cindy Carter, DPW.”
By letter dated February 7, 1997, Mr. Hood of Chesapeake provided the plaintiffs with a copy of the Louisiana lands scheduled for a BLM lease sale on March 20, 1997. In this letter, Chesapeake states that “[t]he majority of these tracts in Vernon Parish are also included in the Central Pines lease to Chesapeake” and that Chesapeake “plan[s] to bid on these tracts at the BLM sale.” In this letter, Chesapeake also states that “[w]e are encouraged by the BLM’s action and believe this will expedite the dеvelopment of lands covered by the Central Pines lease.”
In a Memorandum for the Deputy Director of Public Works at Fort Polk dated February 24, 1997, R. Ellis Smith of the Engineering Plans and Services Division provided information about “a typical production plat of an oil producing site.” The memorandum also describes a decision made “in a past meeting with SONAT to allow products to be trucked from Well 19-1, Well 26-1 and Well 31-1 and piped from Well 19-1 south to Well 31-1.”
In a memorandum dated February 26, 1997, from Mr. Collipp of Sonat to Ms. Carter at Fort Polk, Mr. Collipp provided “a list of the main topics of interest to Sonat” for a meeting to be scheduled between Sonat and Fort Polk “in the next few weeks.” By a memorandum dated February 27, 1997, Fort Polk representatives were invited to a meeting with Sonat representatives on March 11, 1997, to discuss a number of issues related to Sonat’s drilling plans. During this meeting at Fort Polk with representatives from So-nat, UPRC, Fort Polk, and the Forest Service, BLM discussed the federal mineral
As a result of the March 20, 1997 federal mineral lease sale, BLM entered into nine leases containing a total of 5816.38 acres of Group C lands: Leases LAES 48558, 48559, 48560, 48561, 48562, and 48563 were executed with Chesapeake, effective May 1, 1997. These six leases, covering 2771.30 acres, had a primary term of ten years and were leased for $100 to $101 per acre bonus. Leases LAES 48555, 48556, and 48557 were executed with UPRC, effective May 1,1997. These three leases, covering 2545.08 acres, had a primary term of ten years and were leased for $12 per acre bonus. On March 27, 1997, Chesapeake proposed an Agenda for Fort Polk Meeting to be held April 1, 1997, at which representatives of Chesapeake met with representatives of Fort Polk and the Forest Service.
On June 12, 1997, Sonat filed an application with the Louisiana Office of Conservation to drill Well 21-1 in the previously created production unit AUS C RA SUJ.
In 1997, the United States considered offering other lands for mineral lease sale. By memorandum dated July 15, 1997, Rory A. Salimbene, LTC, EN, Director of Public Works requested comments on offers to lease. By memorandum dated July 23, 1997, Stephen M. Sittnick, LTC, IN, G3/DPTMS commented on requests to lease. On March 12, 1998, BLM rendered a decision rejecting a lease offer for LAES 29965.
On July 23, 1997, Chesapeake submitted an application to BLM for a permit to drill the Rieckers 5-1 well in Section 5 Township 1 North, Range 5 West in Vernon Parish. That application was approved on August 15, 1997. By facsimile dated September 2,1997, Chesapeake provided notice to Ms. Carter at Fort Polk that it was scheduled to commence drilling of the well on September 3, 1997, stating, “Due to the proximity of this wellsite to the Fort Polk Intensive Use Area, as a courtesy we are notifying you of the commencement of actual drilling operations.”
The northmost three of Chesapeake’s six federal Group C leases, LAES 48558, 48559, and 48560, were terminated after one year for the non-payment of rent. UPRC’s federal Group C leases LAES 48555, 48556, and 48557 were terminated after two years for the non-payment of rent.
On April 7,1999, the District Court for the Western District of Louisiana entered a summary judgment decision in the quiet title action. The court held that the Group C mineral servitudes, which were created after 1940, were imprescriptible under Louisiana law. On July 28, 2000, the court rendered judgment, granting the United States’ motion for summary judgment and dismissing the plaintiffs’ complaint with prejudice as to Groups A and B. The court reasoned that, unlike Group C, the Group A and B mineral servitudes were subject to prescription under Louisiana state law and that those mineral servitudes had prescribed for non-use. The plaintiffs appealed the court’s decision as to the Group A and B mineral servitudes, and the United States cross-appealed as to the Group C mineral servitudes. On November 28, 2001, the United States Court of Appeals for the Fifth Circuit issued a decision affirming the district court’s decision. Central Pines II,
Other than the lease entered into with Sonat (effective July 1,1996 for eighty acres) and the lease entered into with Chesapeake (effective September 15, 1996 for 4822.10 acres), thе plaintiffs have not entered into any other mineral leases affecting Group C. There has been no actual drilling on Group C. Relatively small portions at the extreme
A Land Utilization Requirement Study for Joint Readiness Training Center and Fort Polk, Louisiana was issued on April 1, 2005. By a document dated January 1, 2007, the Fort Polk modified its Army Range and Training Land Program and published a document related to its Analysis of Alternative Study.
II. TEMPORARY TAKING CLAIM
A. Testimony: Liability and Damages
The plaintiffs presented live testimony from seven witnesses and deposition testimony from an additional six witnesses to show that the government’s decision to offer and lease portions of the plaintiffs’ Group C minerals during the period of the quiet title action discussed above resulted in a temporary taking of the plaintiffs’ mineral servitude.
The government presented direct testimony from five witnesses and deposition testimony of an additional four witnesses to rebut the plaintiffs’ temporary taking claim and assertions regarding just compensation.
Much of the evidence introduced at trial by both the plaintiffs and the government was from geologists and petroleum engineers who testified regarding the mineral potential of the plaintiffs’ mineral servitude and the reasons for the limited leasing of the Group C mineral servitude.
The plaintiffs’ experts, Michael Veazey, a petroleum engineer,
In addition, Mr. Veazey rendered an opinion as to the value of the producing minerals based on either a working interest or royalty interest, depending on whether the plaintiffs would have been directly involved in development or simply received a royalty.
Mr. Harrison, a geologist, supported Mr. Veazey’s conclusions regarding the mineral potential of the Group C lands based on his review of the hydrocarbon potential of the formations that make up the Group C mineral servitude. Mr. Harrison testified that the area where the plaintiffs’ Group C mineral servitude is located has several formations that would likely yield commercial quantities of oil or gas. He testified that the primary formation is the Austin Chalk, but that the Wilcox formation could also likely have significant reserves.
Mr. Harrison was not persuaded by the map produced by government expert Louis Gilbert showing that the most productive wells lie well south of where Mr. Harrison drew the edge of the Lower Cretaceous shelf. Mr. Harrison opined that without 3D seismic testing, which has not been done for Group C and likely cannot be done due to surface conditions on parts of Fort Polk, it is not possible to determine the precise location of potential reserves beneath the Fort.
The plaintiffs next called Patrick Donohue, a certified petroleum landman,
Mr. Donohue testified that he did not believe that the drilling of dry holes would have changed the going rate for Group C leases over time. He testified that the drilling of a non-productive well does not necessarily lead to a loss of interest in the area. Rather, he explained that in a trend play like the Austin Chalk, companies would be willing to “take all of the acreage” and possibly willing to pay a high price for all 21,000 acres of Group C. Id. at 16. Mr. Donohue presented a map showing a range of thirty-two leases, which had bonuses and rents in the area ranging from $10 to $1200. Ex. 352. The leases at the lower end of this range were those granted by BLM on Group C, while the higher end leases are small — less than 100-acre — parcels to the south and/or west of Group C. Mr. Donohue testified that he gave some of these thirty-two leases more weight than others, but that he weighed most heavily the $350 bonus that Chesapeake paid to the plaintiffs for 4800 acres of Group C.
In response to the plaintiffs, the government presented evidence to show that the plaintiffs’ ease was based on a mistaken understanding regarding the location of the productive limits of the Austin Chalk and thus the mistaken belief that all of the Group C lands had mineral potential. The government introduced the testimony of Louis Gilbert, a geologist,
Mr. Gilbert testified that his study of available seismic data confirmed his conclusion as to the location of mineral reserves in the area of Group C and led him to conclude that the geology underlying Group C itself is “not favorable for the accumulation [of] hydrocarbons in commercially sufficient quantities-” Id. at 25. He further testified that his studies showed that the geologic setting underlying Group C is relatively stable, meaning it is unlikely to contain the sorts of traps necessary for the accumulation of hydrocarbons. It is these data and these findings that formed the basis of his opinion that the plaintiffs’ Group C mineral servitude does not likely contain commercial quantities of oil and gas.
Mr. Gilbert also challenged Mr. Harrison’s statements regarding the significance of producing wells in areas to the west and east of Fort Polk. Mf’. Gilbert explained that rather than the Lower Cretaceous shelf edge, it is the Sabine uplift, a separate geologic feature occurring just north of the North Burr Ferry field, that is the geologic feature that causes the Austin Chalk fractures associated with production in that field. He also explained that wells to the east of Fort Polk have not been productive. Rather, Mr. Gilbert explained and demonstrated with a map that commercial quantities of oil and gas have been found only to the south of Fort Polk, as would be predicted from the geologic evidence regarding the location of the shelf.
Mr. Pepper testified next for the government. Based on his reading of Mr. Gilbert’s expert report, other reports by both the plaintiffs’ and the government’s experts, and his own experience in the area as a petroleum engineer, he testified that it was his opinion that most of the plaintiffs’ Group C mineral servitude was not leased because of its poor mineral potential. He explained that this was established by the number of dry holes and poorly-producing wells found around the Group C location. He explained that the proximity of the Scobee 34-1 and Central Pines 21-1 wells was especially illuminating. Both wells are located in the Ki-satchie National Forest,
This combination of drilling results is significant, in my opinion, because the plugging of a well along with the relatively poor production performance of the Scobee 34-1 well[ ] established a northern boundary of the productive Austin Chalk within this area of Group C. Prior to this point in time, companies may have believed that the productive area would extend further north[,] as evidenced by Sonat and Chesapeake’s leasing of the 4902 acres of Group C lands in 1996, but once the results of*324 these two wells were known, the picture changes.
Pepper Aff. at 18. He further testified, “The poor results of the wells along the northern edge of production condemned or at least severely impaired the portion of the Group C lands that had nоt yet been drilled for future Austin Chalk exploration and development.” Id. at 25. Mr. Pepper also explained that it was poor mineral potential, and not the existence of the Fort, that explained the lack of interest in most of Group C. He testified that the challenges presented by exploring and developing oil and gas on a military installation would not deter oil and gas operators that believed significant quantities of oil and gas were present. He testified that oil and gas operators often face many challenges due to geography and the need for cooperation with conflicting land uses, just as would an operator on Fort Polk. However, he testified that “[i]f experienced oil and gas operators believed that the Group C lands were commercially prospective, they would lease it and drill it.” Id. at 33.
Mr. Pepper also testified regarding the fair rental value of the Group C minerals during the period of the quiet title action. He explained that the fair value of the Group C minerals was enhanced by the 1996 Sonat and Chesapeake leases of 4902 acres of Group C’s southern acreage. Mr. Pepper calculated the rental value of the Group C minerals by taking the average of the bonuses provided for in these leases — $100 per acre for the Sonat lease and $350 per acre for the Chesapeake lease. He divided this figure, $225 per acre, in half in order to reach a value for the remaining Group C lands that remained unleased, arriving at a value of $113 per acre for the beginning of 1997. However, he testified that after 1997 several facts would have led to a significant drop in the value of leases on Group C lands. These include the expiration of the Central Pines-Chesapeake lease on September 15, 1997, three of the six United States-Chesapeake leases in 1998, and all three United States-UPRC leases in 1999. He also explained that the marginal production from the Scobee 34-1 well and the abandonment of the Central Pines 21-1 dry hole, both in 1997, would have also depressed the value of Group C leases. He explained that after these events a number of units established nearby were never drilled. He testified that 1999 marked the end of the majority of drilling activity in the Austin Chalk in Vernon Parish, as developers focused their efforts to the east in Rapides Parish. Mr. Pepper explained that, in his opinion, after the Chesapeake lease expiration in 1997, the value of the Group C leases would have dropped by half, to $57 per acre. Once the Central Pines 21-1 well was drilled as a dry hole and other wells in the area were found to be only marginally productive, he testified that the lease value should be halved again, becoming $28 per acre. After 1999 and the end of most drilling in Vernon Parish, he testified that Group C leases would be worth at most $10 per acre. Mr. Pepper’s report and testimony make clear that after determining what he found to be the fair rental value of Group C, he deducted from that the amount that the plaintiffs had received in the form of bonuses and royalties for relevant portions of Group C. Mr. Pepper explained that in addition to the bonus the plaintiffs received for the portion of Group C that they were able to lease, the plaintiffs also received $398,036 from the approximately 458-acre portion of Group C that was within the productive AUS C RA SUC and AUS C RA SUF between early 1997 and the Fifth Circuit’s quiet title decision.
Mr. McKenzie, a petroleum engineer with thirty-five years of experience, provided his direct testimony through affidavit and was
Based on my review of the information available, I believe that the lack of development outside of the trend ... is a result of oil and gas companies delineating the commercial limits of the Austin Chalk reservoir or reservoirs in this area over time through the selective horizontal drilling of certain locations and the subsequent results of that drilling. For example Sonat initially planned to drill several wells on or near the Intensive Use Area in 1996 and 1997. Sonat drilled several locations, one of which was the Central Pines 21 Well No. 1 in the Intensive Use Area. That well was a dry hole. Sonat subsequently ceased operations in the Intensive Use Area, leaving several established and proposed units undrilled.
It is my opinion that a number of noncommercial wells and the dry hole drilled by Sonat in this area condemned the commercial viability of the Austin Chalk formation underlying most of the Group C lands, both within Fort Polk and in the Intensive Use Area.
McKenzie Aff. at 18-19. He also testified that had oil and gas companies felt that the Group C minerals underlying Fort Polk were likely to be productive, at least some of the Group C mineral servitude could and would have been exploited using horizontal drilling, which allows accumulations to be accessed from a mile away or more.
B. Findings and Conclusions: Liability
As the court has previously ruled, the government’s mere assertion of title does not constitute a taking. Central Pines III,
The court finds, however, that the government’s only action constituting “something more” than mere assertion of title was its issuance of mineral leases for a limited portion of Group C for a limited period of time. The evidence established that the government did not interfere with development of the plaintiffs’ Group C mineral interest with respect to the unleased areas. Rather, the government cooperated with potential lessees that requested acreage for mineral lease; the evidence did not support the plaintiffs’ claim that potential lessees requested and were denied the leasing of Group C minerals other than those the government actually leased in 1997. Further, the evidence established that the reason potential lessees did not approach the government about leasing minerals under Fort Polk was because of the limited mineral potential of those areas. It is for these reаsons, as discussed below, that the court finds that the plaintiffs’ have established a temporary taking only for the portion of Group C for which the government issued leases, and only for the period during which those leases were in effect.
The undisputed evidence established that under BLM lease procedures oil and gas companies identified the areas they wanted the government to offer for lease.
The evidence established that the reason for companies’ lack of interest in the majority of Group C was its low potential for commercial oil and gas production. Based on the evidence admitted, the court finds convincing the testimony of Mr. Gilbert, Mr. Pepper, and Mr. McKenzie regarding the location of the Lower Cretaceous shelf edge, the corresponding location of the Austin Chalk, and the limited commercial mineral potential of the reserves in Group C for both the areas that were leased and the areas that were not leased in Group C. These government witnesses relied on unchallenged well, production, and seismic data to reach their conclusions regarding the lack of productive hydrocarbon potential in Group C and provided a reliable explanation for why certain areas were or were not leased in Vernon Parish.
These data were largely ignored by the plaintiffs’ experts, who testified that dry holes and poorly-performing wells would not be relevant considerations for potential lessees. The plaintiffs’ experts testified that without additional seismic testing, potential lessees would have simply presumed that Group C had the same mineral value as areas with known oil and gas reserves in the vicinity of Group C. The plaintiffs’ expert conclusions were not consistent with leasing activity in the area, the well data, or with the geologic evidence. Accordingly, the court does not find these opinions by the plaintiffs’ witnesses to be persuasive.
Mr. Harrison’s opinion that the Lower Cretaceous shelf edge (which would indicate the location of Austin Chalk hydrocarbons) crosses through the middle of Fort Polk was refuted by the available well data and seismic data that Mr. Gilbert examined and persuasively explained. The court also found that Mr. Gilbert persuasively demonstrated that Mr. Harrison’s reliance on the productive area to the west of Fort Polk to show the oil and gas potential of the Group C was mistaken, as the North Burr Ferry field’s productivity is produced because of a separate geologic structure that would not be found underlying Fort Polk.
The testimony of Mr. Gilbert, Mr. McKenzie, and Mr. Pepper established that the reason most of the wells have been drilled to the south of Fort Polk is because the Lower Cretaceous shelf edge — and, correspondingly, the slope that supports the fractures containing Austin Chalk hydrocarbons — is situated to the south of Fort Polk, and thus the Fort itself is unlikely to have paying quantities of oil and gas.
Indeed, as Mr. McKenzie pointed out, the actions — and inaction — of lessees in the area confirmed the government’s expert evidence. The various maps introduced demonstrated that oil and gas companies in the areas moved their drilling activities south of the line drawn by Mr. Gilbert, suggesting that these companies agreed that it was to the south, rather than on the Fort or immediately to its east or west, where oil and gas reserves are likely to be found.
Although the plaintiffs presented the testimony of Mr. Minaldi and some of the plaintiffs to suggest that they were told that several oil and gas companies, including Bel-eo, were interested in leasing “all” of the mineral interests in Group C at some time, these claims were contradicted by other statements from representatives of these same companies. For example, the plaintiffs rely extensively on the deposition testimony of Mel Fife, a landman with Belco, who stated that he believed that Belco would have leased all of Group C but for the limitations the Army placed on drilling on the Fort. However, his statement is inconsistent with and refuted by Belco’s November 1996 letter
This is to inform you and the Command that my client, Belco Oil and Gas Corp., no longer intends to pursue permission to conduct drilling operations on Fort Polk in the foreseeable future. The success of Bel-co operations in other parts of Louisiana has been such that they have decided to concentrate their operations in those areas.
It has been a real pleasure working with you and I hope to have the opportunity to do so again in the future.
Ex. 195 (emphasis added). As this letter indicates, Belco’s reason for deciding not to pursue development at Fort Polk was based on its decision to explore and develop its oil and gas leases elsewhere. Thus, its decision was based on its desire to “concentrate on their operations in [other] areas,” rather than on concerns with restrictions the Army might impose.
Similarly, the evidence established that So-nat strategically focused its efforts in certain areas when it finally negotiated leases with the plaintiffs. The same was true for Chesapeake and UPRC. All of these experienced oil and gas companies focused their leasing activities in specific areas where they believed there was oil and gas potential. They may have at some point considered leasing large tracts of land, including Group C, but they ultimately targeted their leasing activities to specific areas where they believed they would find oil and gas in commercial quantities.
Thus, contrary to the plaintiffs’ contentions, the evidence did not establish that the plaintiffs were unable to lease portions of Group C minerals because of interference by the government. To the contrary, the evidence established that the government never refused a protective lease for Group C minerals. The cоurt is persuaded by the testimony of the government’s witnesses that potential obstacles to developing oil and gas on lands on or near military operations at Fort Polk were not the basis for oil and gas companies deciding not to lease the minerals in these areas. Rather, the evidence established that if oil and gas companies believed in the hydrocarbon potential of any area within Group C, they would have leased the area, regardless of conditions the Army may have placed on drilling. As Mr. Pepper explained, oil and gas companies are willing to undertake drilling activities under extremely difficult conditions if they believe the reserves are sufficient to justify the complications created by geographic restraints and competing land uses. Certainly, the fact that the plaintiffs were able to lease portions of their Group C interests in areas used by the Army on the Kisatehie National Forest demonstrates that Army restrictions were not the determinative factor in deciding whether to lease in Group C. It is for all of these reasons that the court finds that there was not a temporary taking of the unleased portions of Group C during the period of the quiet title action.
While the court is persuaded that there was no temporary taking of the Group C lands that were not leased by the government because the government did not do anything more than assert title, the court is persuaded that there was a temporary taking of the plaintiffs’ Group C mineral interests that were leased by the government. The evidence established that Sonat, UPRC, and Chesapeake were interested the portion of Group C to the south of the Fort during the time that the government was asserting title and that these companies negotiated with the plaintiffs regarding leasing this area. Chesapeake was the only company that entered into leases with the plaintiffs on this portion of Group C. The evidence established that UPRC also expressed an interest in leasing acreage in this area from the plaintiffs, but it entered into leases with only the government. As discussed below, the court finds that the government’s assertion of title together with that issuance of leases to UPRC and Chesаpeake of minerals belonging to the plaintiffs constituted a temporary taking of their mineral interest during the time that the government leases were in effect.
The evidence established that effective September 15, 1996, the plaintiffs entered into a three-year lease with Chesapeake that
The court finds that the government’s theory that its offering of leases enhanced, rather than inhibited, the plaintiffs’ ability to lease its mineral interests was not borne out by the evidence. Rather, the evidence established that once the government began offering Group C for lease, Chesapeake walked away from its lease with the plaintiffs, choosing to lease only from the government for a much lower price. UPRC decided not to enter into a lease with the plaintiffs all together. Had the government not offered the minerals to be leased, interested developers would have had to negotiate with the plaintiffs to secure a lease and prevent other companies from leasing that acreage. Because a lease from the government had the effect of removing acreage from the marketplace, developers did not obtain or retain leases with the plaintiffs once they received a government lease. Thus, the plaintiffs did not receive a benefit from “protective leases” offered by the gоvernment as the government has alleged. Rather, the government’s leasing of plaintiffs’ mineral interests deprived the plaintiffs of the benefit they otherwise would have received from a potential lessee during that period.
C. Findings and Conclusions: Just Compensation for the Temporary Taking
The Fifth Amendment specifies that private property shall not be taken by the government without “just compensation.” U.S. Const, amend. V. Thus, when the government is found to have taken property, just compensation must be paid as damages. In the context of a temporary taking, the proper measure of just compensation is generally recognized to be the rental value of the property (sometimes simply referred to as “fair rental value”) over the period of time for which it was taken. Yuba Natural Res., Inc. v. United States (“Yuba III”),
Mr. Pepper testified for the government regarding his assessment of Group C’s fan-rental value during the relevant time. He began with a value based on halving the average of the lease bonuses the plaintiffs were able to negotiate for Group C: $100 for the Sonat lease and $350 for the Chesapeake lease. He then further halved his fair rental value estimate twice more based on negative events, such as the drilling of the Central Pines 21 well in 1997 and the end of most drilling in Vernon Parish by 1999.
The court finds that fair market annual rent for the temporary taking is $225 per acre based in part on both Mr. Donohue’s and Mr. Pepper’s analyses of the relevant leasing market. The court finds, as Mr. Pepper suggested, that both the Sonat and Chesapeake leases from the plaintiffs are relevant to determining fair value for the mineral servitude that was taken. The Sonat lease provided for a $100 per acre bonus and $75 per acre rental for approximately 28,000 acres; the Chesapeake lease provided for a $350 per acre bonus and $350 per acre rental for approximately 4800 acres. The court finds that $225 per acre, the average of the bonuses that the plaintiffs negotiated for their two adjacent and contemporary leases, is an appropriate measure of the bonus and rental that the plaintiffs would have been able to negotiate from a willing lessee but for the government’s taking of the plaintiffs’ mineral interest. The court does not agree with Mr. Pepper’s methodology of reducing the fair rental value over time, which was not tied to any actual decrease in rental payments occurring in the surrounding area. Rather, the court accepts Mr. Donohue’s conclusion that the rent for the areas that were leased from the government would have remained steady until the Fifth Circuit’s decision. Thus, the plaintiffs are entitled to $225 per acre for the acreage leased by the government and for the duration that it was leased.
Further, the court agrees with both the plaintiffs and the government that the amount of just compensation to which the plaintiffs are now entitled must be reduced by the amount of compensation they received. Mr. Pepper used this methodology in calculating fair rental value, deducting amounts the plaintiffs received through the bonus from Chesapeake and royalties for the portion of Group C included in producing units. The plaintiffs have proposed a similar approach, acknowledging, as noted above, that the just compensation to which they are entitled is offset by the lease bonus they have received. Pis.’ Post-Trial Br. 16. The plaintiffs did not address deducting the amount they received as royalties, but did
The court finds that the plaintiffs received a bonus of $850 per acre for their leases with Chesapeake that partially overlapped the acreage leased by the government. The court further finds that the plaintiffs received royalties totaling $898,036 from 1997 until the Fifth Circuit’s decision in 2001. These royalties and the amount of the Chesapeake bonus that is attributable to the period during which both the plaintiffs and government were leasing the property must be deducted from the gross measure of fair market value of the acreage leased by the government, as “[t]he proper measure of damages for a temporary taking of a going business concern [is] the difference between the fair market rent the owner could have earned, but for the taking, and the rent, if any, the owner earned during the takings period.” CCA Assocs. v. United States,
The government leased to UPRC 2545.08 acres of Group C pursuant to LAES 48555, 48556, and 48557, effective May 1, 1997 and expiring May 1, 1999. For these leases, the plaintiffs are entitled to just compensation— $225 per acre for two years — amounting to $1,145,286.00. Similarly, government leases LAES 48558, 48559, and 48560, effective May 1, 1997 and expiring May 1, 1998, covered 1754.81 acres. For these leases, the plaintiffs are entitled to just compensation — $225 per acre for one year — amounting to $394,832.25. Finally, government leases LAES 48561, 48562, and 48563, effective May 1, 1997, remained in effect until the Fifth Circuit’s ruling in the quiet title action on November 28, 2001 and covered 1016.49 acres. For these leases, the plaintiffs are entitled to just compensation — $225 per acre for the 4.6 years between May 1, 1997 and November 28, 2001 — amounting to $1,052,067.15. The total just compensation for the acreage leased by the government is thus $2,592,185.40 for the time in which the nine government leases were in effect, resulting in the government’s temporarily taking the plaintiffs’ mineral interest.
From this amount, the court must deduct the amount that the plaintiffs did receive during the period of the taking. The plaintiffs received a first-year lease bonus of $350 per acre from Chesapeake for its lease effective September 15, 1996; 4016.05 acres of this lease overlapped with the acreage leased by the government to Chesapeake and UPRC under leases effective May 1, 1997. The portion of the plaintiffs’ bonus attributable to the 4.5 months of overlap for these 4016.05 acres is $527,106.54. Additionally, approximately 458 acres of the relevant portion of Group C were included in producing units; the plaintiffs received royalties for these units in the amount of $398,036 through November 28, 2001. Thus, the net amount of just compensation now due to the plaintiffs is $2,592,185.40 less the $527,106.54 and $398,036 they received, which amounts to $1,667,042.86.
III. PERMANENT TAKING CLAIM
A. Findings and Conclusions: Statute of Limitations
The court heard testimony at trial regarding the plaintiffs’ claim of a permanent physical taking of their mineral servitude based on the Army’s concession that the plaintiffs will not be given access to certain areas within Fort Polk that are subject to the plaintiffs’ mineral servitude. These areas in-
As set forth in the parties’ joint stipulations, it is not disputed that for most of Fort Polk’s early history there was a moratorium on drilling on the Fort, but after the moratorium was lifted in 1978, the plaintiffs were on notice that certain surface areas within Fort Polk would remain off limits for direct drilling.
By a letter dated January 20, 1976, Mr. John C. Camp, attorney for Wm. T. Burton Industries, Inc. [ (“Burton”) ], wrote to Mr. Darwin L. Wilder, Chief of Acquisition, Fort Worth District, Corps of Engineers, to summarize representations made on behalf of Burton at a recent meeting regarding an extension of the moratorium, ARCO’s drilling and exploration activities and other matters.
Fact Stip. No. 42. In this 1976 letter, Mr. Camp made clear that Burton was aware of the impact area and understood he would not be able to drill directly for minerals from that area:
We, therefore, desire to negotiate some arrangement with your office that would permit the conduct of seismic work, and one or more strategically located exploratory wells, in the northerly and northwesterly portion of the Fort Polk Artillery range. We are not contemplating activity in the impact portion of the range ....
The area of interest should be distinguished from the artillery range impact area, which would present unusual safety hazards to a mineral operation.
Ex. 66 (emphasis added).
In addition, the parties have stipulated that these limitations on drilling remained one year later:
On February 16, 1977, Darwin L. Wilder, then Chief of the Acquisition Branch of the Real Estate Division of the U.S. Army Corps of Engineers, met with Burton representatives John Camp and Charles Car-wile. At this meeting, Mr. Wilder furnished Mr. Camp and Mr. Carwile with a map “showing 25,800 acres outlined in red where drilling would not be possible as this is the impact area.”
Fact Stip. No. 46; see also Ex. 80 (Mr. Wilder’s contemporaneous memorandum of this meeting). The map provided to Mr. Camp and Mr. Carwile is not attached to the 1977 memorandum. However, using a map from that time period, Steven Chadwick from Fort Polk explained in his direct testimony at trial that the area known as the Leesville Artillery Range (“LAR”)
Another small impact area possibly containing unexploded ordinance has also been in existence for some time according to Mr. Chadwick’s unchallenged testimony. Mr. Chadwick testified that this area is within the historic artillery range impact area as shown on an exhibit that overlays a 1954 Leesville Artillery Range map, a current Fort Polk map, and a map showing the location of the plaintiffs’ Group C mineral servitude. Ex.
These admitted facts and the unchallenged testimony of Mr. Chadwick establish that the plaintiffs knew or should have known no later than 1977 that certain surface areas within Fort Polk, including the RLIA, were unavailable for direct drilling.
The plaintiffs admit in their pretrial brief that “the same situation exists today as it did in 1977 when the plaintiffs’ ancestor tried to gain access to drill.” Pis.’ Pre-Trial Mem. at 10. Using the 1977 date, the six year statute of limitations for the plaintiffs’ permanent physical taking claim expired in 1983.
It is well settled that claims brought under the Tucker Act are “barred unless the petition thereon is filed within six years after such claim first accrues.” 28 U.S.C. § 2501. The six-year statute of limitations “is a jurisdictional requirement attached by Congress as a condition of the government’s waiver of sovereign immunity, and, as such, must be strictly construed.” Hopland Band of Pomo Indians v. United States,
The Federal Circuit has held thаt “[a] cause of action cognizable in a Tucker Act suit accrues as soon as all events have occurred that are necessary to enable the plaintiff to bring suit.” Boling v. United States,
The plaintiffs’ complaint in this case was not filed until 1998, long after the statute of limitations expired as to any physical takings claims based on the denial of access to impact areas within the original LAR, including the smaller RLIA.
B. Findings and Conclusions in the Alternative: Failure to Prove a Permanent Physical Taking
Although for the reasons discussed above, the court finds that the statute of limitations has run on the plaintiffs’ permanent physical takings claim with respect to
Because the government conceded that surface access to certain areas within Fort Polk would be foreclosed, the bulk of the evidence presented regarding a permanent physical taking claim came from government witnesses who testified that regardless of whether the government has barred physical access to the surface of certain Group C lands, the mineral servitude associated with those lands remains accessible. The court heard testimony and received evidence from Don Bazer, a petroleum engineer with experience in the design of oil and gas wells using horizontal drilling techniques,
In his analysis of the accessibility of the plaintiffs’ minerals that underlie the RLIA, in particular, Mr. Bazer utilized a proposed unit spacing pattern and well location map that had been prepared by the plaintiffs’ expert, Val Miller.
Finally, to the extent the plaintiffs presented evidence to suggest that operation on portions of Fort Polk would be difficult or uneconomical because of the Army’s operations there, that argument is irrelevant to the plaintiffs’ physical takings claim.
The government acknowledges that the surface within the RLIA cannot be safely accessed for drilling operations. However, the inability to use the surface area within the RLIA does not preclude or unreasonably impede the plaintiffs’ ability to develop and extract the Fort Polk Group C mineral servitude, because there are reasonable alternatives available to the plaintiffs and their potential lessees for developing the Group C mineral servitude either themselves or by leasing the mineral acreage to a company that believes the acreage is commercially prospective.
The court finds based on the testimony of Mr. Bazer and Mr. Chadwick that there are reasonable alternatives to exploration or development of the Group C mineral resources through the relocation of proposed well surface locations and the utilization of the horizontal drilling techniques that are commonly used in the drilling of Austin Chalk wells. Thus, the fact that there are some surface portions of the Fort Polk Group C lands where a well could not be located does not constitute a permanent physical taking of the plaintiffs’ mineral servitude underlying those locations.
IV. CONCLUSION
Based on the foregoing, the court concludes that the government’s leasing of the plaintiffs’ mineral servitude constituted a temporary taking of that servitude. To fulfill the mandate of the Fifth Amendment, the court awards the plaintiffs the amount of $1,667,042.86 — representing the fair rental value of the servitude that was taken — plus compound interest from the date of the taking as a measure of just compensation. The plaintiffs shall file any claim for attorneys fees and costs pursuant to 42 U.S.C. § 4654(c) (2006) within thirty days from the filing of this opinion. The court shall enter judgment upon resolution of the plaintiffs’ claim for fees and costs.
IT IS SO ORDERED.
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Notes
. The plaintiffs filed a quiet title suit with regard to their mineral rights in the Western District of Louisiana on August 22, 1996. The decisions of that court clarifying the nature and ownership of the mineral servitude may be found at Central Pines Land Co. v. United States, No. 2:96-2000 (W.D.La. Apr. 7, 1999) ("Central Pines I"), aff'd,
The plaintiffs filed the present case on April 4, 1998, alleging a taking of their mineral interests. The case was stayed pending resolution of the quiet title dispute. Two previous opinions in this court have narrowed the issues remaining in this case. In Central Pines Land Co. v. United States,
Unless or until the plaintiffs have formally asked for and been denied access to lands on Fort Polk for mineral exploration or development purposes, their claims based on interference with their right to access under the Louisiana Mineral Code both during and after resolution of the title question are not ripe and must be dismissed.
To the extent that the plaintiffs' access to certain areas in Group C is permanently precluded because of military operations in the area, the plaintiffs’ permanent physical takings claims based on lost access are properly before the court. Where access to mineral exploration and development is lost because of military activities that prevent, rather than merely restrict, access, the court could find that the plaintiffs’ right to extract its minerals has be[en] taken.
Order on Def.’s Mots, in Limine at 5-6, Aug. 10, 2010, ECF No. 167 (emphasis in original).
. The court has not included all of the stipulated facts in this opinion. It has not repeated facts that were also discussed by witnesses. The court has also eliminated facts that it has determined are not relevant to the issues remaining before the court.
. Attached to this opinion are one map showing the location of the Group C servitude and the boundaries of Fort Polk and the Kisatchie National Forest, see App. A, and a second map showing the portions of Group C leased by the plaintiffs and the United States, see App. B.
. See App. A.
. The owners of Central Pines and Tower Minerals are descendants of William Burton.
. Fort Polk consists of the Fort Polk "Main Post" and Peason Ridge. The Main Post includes approximately 67,459 acres of land owned by the Army. Peason Ridge contains approximately 33,-000 acres, wholly separate and to the north of the Main Post. Peason Ridge is not shown on the map attached to this opinion.
. Under a special use permit from the Forest Service, the Army uses approximately 39,565 acres of adjacent Kisatehie National Forest lands that are designated as the "Intensive Use Area,” and approximately 44,779 acres of Kisatehie National Forest lands that are designated as the "Limited Use Area.”
. The Louisiana law of prescription provides that a mineral servitude will expire if there has not been any drilling to exploit the resource within
. Mineral leases typically include a first-year bonus payment, royalty rates, and delay rental rates that are paid only in the event royalties are not paid. At the end of the first year, a lessee will owe a rental payment to maintain the lease unless, prior to that time, the lessee has drilled one or more wells. If the lessee does not pay the delay rental for each year that it has not drilled a well, it will lose the lease. See Donohue Aff. at 13.
. Wells are generally referred to by the mineral owner’s name, the section in which they are located, and a well number. Thus, "Scobee 34-1” refers to a well drilled into minerals owned by Scobee, located in a section number 34, and designated as well number 1 in that section.
. A “protective” or "protection” lease is used in the situation where ownership of the asset to be leased is disputed. The lessee obtains leases for the same property from all parties to the ownership dispute, often containing a clause that once ownership is resolved, the non-owner will repay all bonuses, rent, and royalties paid by the lessee. See Pepper Aff. at 21-22.
. The location of this lease, and the other leases affecting Group C, is shown in a map attached to this opinion. See App. B.
. The government's position in the quiet title action was that all of the minerals, including those in Group C, had prescribed under Louisiana law.
. The letter also included information regarding the plaintiffs’ mineral interest in Group A and B lands, which were eventually titled to the United States. See Central Pines II,
. The unit naming convention is such that "AUS C” refers to “Austin Chalk,” "RA” refers to "Reservoir A,” and "SUJ” refers to "Sand Unit J.” See Tr. 62:17-63:5.
. The well itself was not on Group C acreage.
. Direct testimony in this case was submitted by affidavit. Live testimony at trial was limited to cross-examination, redirect, and rebuttal. Many witnesses’ testimony was related to both the plaintiffs' temporary and permanent takings claims.
. The plaintiffs also argued that the government’s undisputed decision not to allow access to certain surface areas on Fort Polk resulted in a permanent taking of a portion of their mineral servitude. The permanent taking claim is addressed infra Part III. As noted supra note 1, the court has previously determined that the plaintiffs' taking claim based on the “conditions” the Army has imposed on oil and gas production and development on Fort Polk are not ripe. In particular, the court ruled that because there is no evidence to show that any lessees of the plaintiffs' mineral servitude on Fort Polk or within the Kisatchie National Forest were ever denied access by the Army for oil or gas exploration or development a taking claim based on potential denials of access in the future are not ripe for review. See Order on Def.'s Mots, in Limine at 5-6, Aug. 10, 2010, ECF No. 167; Central Pines TV, No. 98-314.
.Based on the plaintiffs' contention that the taking of their mineral interests began in 1995 and encompassed the entirety of Group C, they agree that the first-year bonus they received from Chesapeake in 1996 should be deducted from the total damages they seek. Pis. Post-Trial Br. 16.
. Like the plaintiffs’ witnesses, many of the government’s witnesses’ testimony related to both the temporary and permanent takings claims.
. The government presented evidence, in the alternative, regarding the potential value of leases for Group C minerals if the court were to find a temporary taking.
. Mr. Veazey received a B.S. and M.S. in Petroleum Engineering from Louisiana State University ("LSU”) in 1966 and 1968, respectively. He has thirty-eight years of experience as a Registered Professional Engineer; his expertise is largely reservoir engineering. He has taught numerous courses at LSU, published numerous papers, and now works for a petroleum consulting engineering firm. His testimony as an expert in petroleum engineering was not objected to.
. Mr. Harrison received his B.S. in Petroleum Geology from LSU in 1950. He worked for Union Production Company as a geological scout in Mississippi and Louisiana in 1950 to 1951. He then worked for the U.S. Army as an Ordnance Officer from 1951 to 1953. From 1954 to 1959 he worked as an exploration geologist for Seaboard Oil Company, Trans-Tex Drilling Company, and American Natural Gas Production Company. In 1959, he left the latter company and began his independent consulting and independent Louisiana oil and gas development activities. He has been the manager of Optimistic Energy, LLC since 2004; he has also been the president of Optimistic Oil Company since 1983, of which he is also the sole owner. His testimony as an expert in petroleum geology was not objected to.
. As discussed above, portions of Group C are within units that have produced oil, but none of the producing wells are located in Group C.
. The Austin Chalk is an upper Cretaceous geologic formation in the Gulf Coast region that extends from Texas, across Louisiana, and into Mississippi. The formation is made up of limestone and shale and is found at depths from approximately 10,800 to 12,800 feet. A typical Austin Chalk well involves drilling down to a certain depth and then drilling two laterals, which extend horizontally around 5000 feet each. The horizontal laterals are used in the Austin Chalk because the formation is naturally frac
. Mr. Veazey arrived at the 363,000 barrel figure by averaging the production from certain Austin Chalk wells in surrounding areas. During cross-examination, however, he was unable to recall why he excluded from or included in this average certain wells. He acknowledged that there was not much production data from the units adjacent to or close to Group C and that production in the Austin Chalk varies considerably. He also agreed on cross-examination that it appears from a map prepared by government expert Don Bazer showing cumulative production in the area that the productivity of wells generally reduces moving north towards Group C.
. He explained that production from other geological horizons, such as the Tuscaloosa, Edwards Reef, and Glen Rose formations, would be unlikely.
. Mr. Donohue received a B.S. in Economics and Finance from the University of Southwestern Louisiana. He has been either an in-house or independent landman since 1975 and has substantial experience valuing oil and gas properties. His testimony as an expert landman was not objected to.
. Mr. Gilbert received his B.S. in Geology from Millsaps College in 1982. He has worked in the field of petroleum geology for the past twenty-eight years, beginning at Ted Hoz & Associates evaluating hydrocarbon accumulations in Louisiana and surrounding areas. He founded his own company, Lodis Gilbert & Associates, in 1994, and in that regard is involved in prospect screening, field studies, 3D seismic interpretation, property appraisals, and production auditing. He has served on several industry committees, having been appointed by the state Commissioner of Conservation. His testimony as an expert in petroleum geology was not objected to.
. Mr. Pepper received his B.S. in Petroleum Engineering from the University of Missouri at Rolla in 1972. He received an M.B.A. from the University of Houston in 1991, and a M.S. in Petroleum Engineering in 1998. He is a licensed professional engineer in Texas and Louisiana. Mr. Pepper worked as a production engineer and drilling engineer for Shell Oil Company and Bass Enterprises Production Company in Louisiana, Mississippi, Texas, and offshore from 1972 to 1978. He then worked for a engineering consulting firm specializing in hydraulic fracturing projects and a separate operating company that drilled and produced Austin Chalk wells. Beginning in 1980 he worked for Langham Petroleum Exploration, and in 1999 created Langham, Pepper & Associates; both of these are independent oil companies active in the Austin Chalk and many other areas. He is also involved in a separate minerals acquisition company, Russell T. Rudy Energy, LLC. His testimony as an expert in petroleum engineering was not objected to.
. Mr. McKenzie received his B.S. and M.S. in Petroleum Engineering from LSU in 1972 and 1974, respectively. He was owner and president of D-O-R Engineering, Inc. from 1986 until 2009, during which time he was involved in all aspects of the firm’s consulting services, which concerned hydrocarbon reserve determinations. He has experience with the Austin Chalk based on an extensive study of the geographic limits of the formation in Vernon Parish and to the east. His testimony as an expert in petroleum engineering was not objected to.
. The Scobee well is in the Limited Use Area, and the Central Pines well is two miles to the north, in the Intensive Use Area.
. Although the unit wells were not on Group C, because some Group C acreage was within those productive units, the plaintiffs received a share of the royalties for these units. The plaintiffs' lease with Chesapeake with respect to these acres continued to be "held by production,” even while Chesapeake declined to pay delay rentals with respect to the balance of its Group C acreage leased from the plaintiffs.
As discussed above, the court agrees that these amounts, which the plaintiffs have not deducted from the damages they seek, must be deducted from the amount of just compensation owed to the plaintiffs because, like the bonus paid to the plaintiffs, these royalties are compensation received by the plaintiffs for the mineral interest taken.
. Because the plaintiffs opted not to cross-examine Mr. McKenzie, his testimony, in the form of his affidavit, was never questioned.
. As discussed supra, n. 11, protective leases are recognized under Louisiana law as leases involving minerals where title is in dispute and ar
. Chesapeake allowed this lease to expire for non-payment of rent a year after it took effect, except to the extent approximately 458 acres were held by production because of their inclusion in productive units, for which the plaintiffs received the above-mentioned royalties.
. These leases are shown on the map found at Appendix B. See also Ex. 356.
. As discussed in the section on just compensation, to the extent the plaintiffs received a bonus from Chesapeake or royalties from acreage also leased by the government, these amounts were compensation to the plaintiffs and must be deducted from the total owed by the government.
. The plaintiffs argue that the taking began in 1995 when they learned of the government’s assertion of title and did not end until the Fifth Circuit ruled on the title question. The court disagrees. The applicable law (and law of the case) provides that mere assertion of title is not enough to constitute a taking. As discussed above, the court finds that the only affirmative act supporting a taking is the government's leasing of the plaintiffs’ minerals, which became effective on May 1, 1997. Thus, May 1, 1997 is the earliest date of a taking supported by the record in this case.
While a district court’s decision is final and enforceable unless and until reversed on appeal. the finality of the district court’s decision in this case is of no moment because the government apparently continued to accept rent for a portion of Group C after this decision. To the extent the government’s leases had not previously expired for nonpayment оf rent, they ended with the Fifth Circuit ruling on November 28, 2001. Thus, the government’s taking ultimately ended with this final decision of the Court of Appeals.
. Using this methodology, the plaintiffs claimed that they would be entitled to $42,619,500 for the temporary taking of the entirety of the Group C mineral servitude.
. The parties have also stipulated that the historic impact area within the Leesville Artillery Range, which overlaps with the RLIA, was inaccessible from as early as 1955.
. The Leesville Artillery Range was later known as the Leesville Artillery Impact Area or the Leesville Impact Area, but all are referred to here as "LAR."
. A small portion of the RLIA extends west of the bounds of the historic LAR.
. The direct testimony of Jack E. Lawton, Jr. further supports the conclusion that plaintiffs knew of issues regarding access and use of certain surface areas within Fort Polk in the 1970s. Mr. Lawton testified, "I may have first learned about our problems with access to our Fort lands back in the 1970[]s. I mean the artillery range has been there forever.” Lawton Aff. at 7. Mr. Lawton further testified that "[t]he impediments that the United States put in place that prevented us from accessing our mineral rights in the mid-1990[]s were the same impediments that were there in the 1970[]s. The artillery shells — the impediments have been accumulating a long time and continuing.” Id.
. To the extent other areas that were identified by Mr. Chadwick were outside the historic LAR, there was no evidence as to when the plaintiffs learned of those areas, and the court thus finds that the statute of limitations has not run as to the plaintiffs’ claims regarding these areas.
. The court has previously determined that the plaintiffs’ claims based on allegations that the Army's interference with access amounts to a regulatory taking are not ripe for review because the plaintiffs have not sought and been denied access to this portion of their mineral servitude. As the Federal Circuit recently explained in Casitas Mun. Water Dist. v. United States,
. Mr. Bazer received a B.S. in Petroleum Engineering from LSU in 1960. His over forty years of experience drilling oil and gas wells includes selecting surfacе locations and planning well paths using both directional and horizontal drilling. He has worked in this capacity for numerous oil companies in Louisiana and since 1991 has worked as a consultant for D-O-R Engineering, Inc.
. Mr. Miller received his undergraduate degree in Business Administration and M.B.A. from Northeast Louisiana University in 1975. He belongs to several professional landman organizations, has been a Certified Professional Landman since 1987, and has worked for numerous clients in that capacity, specifically in the oil and gas context in Louisiana and surrounding areas.
. The evidence established that in Louisiana, the development of the Austin Chalk is governed by Statewide Order No. 29-S, promulgated by the Louisiana Office of Conservation. Order 29-S permits the development of the Austin Chalk by the use of horizontal wells and spacing rules that provide for the creation of geographic drilling units that are sized as follows:
[A] subsequent Austin Chalk Formation horizontal well shall not be located so as to encroach into a rectangle formed by drawing north-south lines 3,000 feet east of the most easterly point and 3,000 feet west of the most westerly point and east-west lines 100 feet north of the most northerly point and 100 feet south of the most southerly point of any horizontal well completed in, drilling to, or for which a permit shall have been granted to drill to the Austin Chalk Formation.
La. Admin. Code, tit. 43 § 4305(A)(2)(a).
. Mr. Miller's proposed units were in the vicinity of 1300 acres each. He confirmed during cross-examination that his projected units could have been larger, which would have allowed for a drilling plan involving fewer wells.
. Mr. Bazer acknowledged during cross-examination that the traditional design of Austin Chalk wells includes two laterals, but stated that “[tjhere are quite a few single laterals.” Tr. 571:4-5.
. Bolstering Mr. Bazer’s conclusions is the fact that Mr. Harrison, a geologist expert for the plaintiffs, proposed similar horizontal drilling techniques in his testimony regarding drilling for Group C minerals from locations outside of the Fort Polk boundaries. Pis.’ Pre-Trial Mem. at 99; Harrison Aff. at 44-45. This testimony was presented by the plaintiffs' in the context of Mr. Harrison’s assumption that no development
. This tank battery facility consists of an assemblage of tanks designed to hold oil or water. The Aldridge facility includes three tanks that hold 16,800 gallons each, plus a separator and pressure vessel that separates the oil and water produced from the well and then sends the oil to the tanks and the water to a disposal well. Aldridge Aff. at 4.
. Mr. Chadwick stated in his direct testimony that the currently producing Aldridge well is approximately two miles south of the Restricted Training Area on Peason Ridge, which contains three impact areas. The proposed Aldridge well is approximately one mile south of the Restricted Training Area. Chadwick Aff. at 9.
. The restrictions the plaintiffs refer to, such as the depths at which pipes must be buried, restrictions on the frequency and duration of drilling operations, and limitations on the use of flares, could be relevant to a regulatoiy, rather than a physical, takings claim.
. As discussed above, the court has previously ruled more than once that the plaintiffs’ regulatory taking claims are not properly within the jurisdiction of this court because they are not ripe for review. Central Pines IV, No. 98-314, slip. op. at 23-26; Order on Def.’s Mots, in Limine at 5, Aug. 10, 2010, ECF No. 167.
. With regard to the smaller areas outside the historic LAR in which the government also acknowledges that surface use would not be allowed and for which the statute of limitations has not run, the court reaches the same conclusion. Based upon Mr. Bazer's testimony about the technological capabilities of and flexibility afforded by the use of horizontal drilling and Mr. Chadwick’s testimony regarding the location of these smaller areas, the court finds that the denial of access to these surface areas, like the denial of surface access to the much larger RLIA, does not render the plaintiffs unable to access the mineral servitude underlying these areas. Further, none of the plaintiffs' projected well locations appear to be affected by any of these smaller areas.
. Because the court concludes that there has not been a taking of the acreage that the plaintiffs have not leased or of the areas where access is limited, the court does not have occasion to discuss or opine on the testimony of Mr. Veazey, who testified regarding the value of the Group C mineral servitude.